While no decision has been announced by the companies as of early Monday evening, some sources believe that the Bush administration is still split over the proposed ASML-SVG merger.

And judging by today's activity in the stock market--especially with the falling share prices of both ASML and SVG--it's unclear if the Bush administration will even make the final decision by the deadline this evening.

The market reacted as though the ASML-SVG deal hit a snag in Washington, which possibly portends that the merger will be delayed for the second time. Today, in fact, ASML's shares fell $1.27 per share to $26.29, while SVG dropped $3.44 to $29.56.

Fearing that the Bush administration will not reach a consensus in the ASML-SVG merger by the midnight deadline, institutional investors today appeared to be selling off their shares in the two lithography companies--and quickly, according to sources in the industry.

"The deal is at risk," said one analyst on Wall Street. Calls to ASML, SVG, and various U.S. government agencies were not returned.

Many fund managers were reacting towards what were a plethora of rumors in the market. But still, the final outcome could go in several directions:

*The Bush administration could approve the ASML-SVG merger.

*The administration could block the merger.

*The admininstration will approve the merger, but will also force ASML to sell SVG's Tinsley optical operation, due to national security issues.

*They could delay the review process even further, forcing both ASM Lithography and SVG to re-file their case to CFIUS. In fact, the U.S. government in the past has delayed a few mergers in the high-technology arena, due to national security issues. In some cases, the merger has been called off due to the inability to obtain this approval, analysts said.

ASML is attempting to buy SVG to become the world's largest supplier of lithography systems for semiconductor production. The acquisition was apparently moving ahead to be finalized in the first quarter, but then it was suddenly delayed when Committee on Foreign Investment notified the companies that it was conducting a 45-day review of the proposed purchase because of potential national security concerns (see March 8 story).

That review appeared to be going along smoothly for the ASML-SVG merger, but at the start of April a non-profit group in Washington, called the U.S. Business and Industry Council, began circulating a video tape that shows lithography experts against the sale of SVG and its leading-edge technology to the Dutch company. About 650 copies of the controversial 15-minute tape were sent to leaders in Congress and U.S. government officials, including President Bush (see April 13 story).

ASML and SVG officials have called the tape a last-ditch effort to stop the purchase, which has received the endorsement of Intel Corp. and other U.S. chip makers as well as the Semiconductor Industry Association (SIA).

But officials in the Bush administration are still apparently wrestling with the proposed sale.

Today, a U.S. interagency panel, called the Committee on Foreign Investment in the United States (CFIUS), is supposed to form a consensus on ASML's takeover of SVG. CFIUS is an Executive Branch body with representatives from various departments, including State, Defense, Treasury, Commerce and others.

Then, CFIUS is supposed to make a recommendation to the Bush administration, which will then make its final ruling. As of late Friday, the Bush administration was struggling to take an official position on the proposed ASML-SVG merger (see April 20 story ).